Israeli troops entered the border town of Bint Jbeil, a Hezbollah military stronghold, for the first time late on Tuesday as they pushed deeper into Lebanese territory, a UN spokesman said.
The Israeli army, which has been encountering fierce resistance in its war on Hezbollah despite its clear military superiority, entered the border town following a day of fierce fighting with the Lebanese Shiite guerrillas.
"The Israeli army is in Bint Jbeil. Some sporadic fighting is ongoing inside and around the town," Milos Strugar, spokesman for the United Nations Interim Forces in Lebanon (UNIFIL), said.
Asked whether the Israeli troops had captured the town, Strugar said: "It is difficult to know what is really happening at this time.
"The civilian population in Bint Jbeil is caught in the crossfire," he added.
The town lies just a few kilometres (miles) from the border and is close to Marun al-Ras, a strategic hilltop village seized by the army on Saturday.
Israel's advancing forces traded fire with Hezbollah guerrillas along the road between Marun al-Ras and Bint Jbeil before reaching two strategic hilltops overlooking the town from the southeast and southwest, and finally entering it.
The troops' entry into Bint Jbeil came after parachute commandos were sent in about a kilometre (more than half a mile) closer to the town while artillery and aircraft bombarded houses on its outskirts, Lebanese police said.
Two Israeli soldiers had been killed in pitched battles with Shiite militiamen near Bint Jbeil on Monday as Israeli forces moved deeper into Lebanon in an increasingly deadly conflict that is now in its 14th day.
Fourteen other soldiers were wounded, six reportedly hit by friendly fire.
"Beit Jbeil is in our hands," General Alon Friedman, one of Israel's top commanders for its northern region, told Israeli army radio earlier on Tuesday.
"Our aim in Beit Jbeil is to destroy the infrastructure of Hezbollah and to liquidate that organization's terrorists in order to reduce the (rocket) attacks on the north," Friedman said.
Hezbollah said five of its fighters were killed during clashes with Israeli forces. Two Hezbollah medics were also killed while evacuating civilian victims of bombardments, a statement said.
Fellow Shiite group Amal said that four of its fighters had been killed. Neither side specified the location or the date of the deaths. Hezbollah's total losses stand at 26 while a total of five Amal fighters have died.
In the evening, Israeli forces launched three more air raids east of Tyre, destroying two houses. There were no immediate reports of casualties.
On Monday, Israeli forces had tried to advance on Bint Jbeil but faced strong resistance from Hezbollah and stopped just short of reaching the outskirts of the town.
The latest military deaths brought to 41 -- 24 servicemen and 17 civilians -- the toll of Israelis killed since the conflict erupted on July 12 after Hezbollah militants captured two soldiers and killed eight others in cross-border attacks.
Hezbollah, the Party of God which was formed after Israel's bloody 1982 invasion of Lebanon, is demanding a prisoner swap but Israel has so far refused any negotiations.
In the latest Israeli air strike, a family of seven, including at least two children, lost their lives when a missile slammed into their home in southern Lebanon on Tuesday, police said.
The attack pushed the death toll in Lebanon since the start of Israel's offensive to 394, including 335 civilians, according to a count compiled from reports from medics, police and Hezbollah.